< 2! 4! 6! 8! Who Do We Consolidate?

Transcript

Friday, November 02, 2007

BOB GARFIELD:
It's been a busy week for the FCC and its chairman, Kevin Martin. On Wednesday the commission held a sixth and final public hearing on media consolidation and its effects on local news coverage. The chairman seeks to relax a rule which prohibits media giants from owning both a broadcast station and a newspaper in the same area.

Also this week, the FCC tackled competition in the cable industry, ruling that apartment building operators can no longer enter into exclusive contracts with cable companies. The new ruling even nullifies current cable contracts struck through those exclusive deals.

John Eggerton is the Washington bureau chief for Broadcasting and Cable magazine. He explains the implications of the FCC's pro-competition cable ruling.
JOHN EGGERTON:
The FCC ruled that cable companies and building owners -— apartment and condo owners —- can't strike exclusive deals for video programming and other services. Comcast says that, and they're the largest cable operator, that's going to affect something like, you know, 2.5 million customers. And what it means to like telephone companies and competitors to cable is that they get to go in and try to compete and try to sign up these buildings for their service.
BOB GARFIELD:
Two-and-a-half million ain't nothing. It's 10 percent of Comcast's customer base. Does this presage some sort of more gimlet-eyed regulatory view of cable operators and their penchant for monopoly markets?
JOHN EGGERTON:
I'm not sure, at least in the FCC's position, that you can get more [LAUGHS] gimlet-eyed than they are. I mean, essentially, Kevin Martin frequently will invoke the doubling of cable rates. And the thrust of his commission really has been to open up cable to competition, to try to get cable to unbundle its services, and at several points to give consumers – viewers -- more choice and more control over their programming. And I think this is all part of that.
BOB GARFIELD:
Now, the commission also held hearings on a longstanding issue of media ownership and the consolidation of media. They focused on the issue of localism. Tell me about what localism is all about, please, and what was the thrust of the hearing.
JOHN EGGERTON:
Localism has several facets. Is your radio station, for instance, operated by a local broadcaster? Is it owned by a large corporation somewhere else? Is there somebody actually on site? That's one part.

Local news is, I think, a very important part of that, particularly for people who are against media consolidation, because they say, if a newspaper and a TV station are allowed to be owned in the same market that sometimes local news is actually decreased, rather than increased, and that local news tends to be "it bleeds, it leads" or tabloid for the sake of eyeballs, as opposed to, you know, public affairs, community service, local elections -— news that you can use from a local viewer's perspective.

I think that's what incited the passions at the localism hearing that was held this week at the FCC headquarters.
BOB GARFIELD:
Yeah, it was pretty passionate. It, at some points, began to look like an episode of Let's Make a Deal, people [LAUGHS] in the audience in colorful costumes. Tell me about them!
JOHN EGGERTON:
Well, yes, there was the woman with the pink crown, though I never could figure out exactly what she was for or against. But there were the cheerleaders that had “FCC” emblazoned on their chests and were leading anti-consolidation cheers, like, you know, "Two, four, six, eight, who do we consolidate?" [BOB LAUGHS] "Media, media, media!"
BOB GARFIELD:
[LAUGHS]
JOHN EGGERTON:
And it drew a chuckle or two and a lot of photographers. But there was also a lot of serious concern about a number of issues, from minority ownership to the degradation of women through hip-hop, to a lack of local news, to a loss of jobs.

The localism hearings —- they've had several —- and they've also had several media ownership hearings around the country, and they often draw passion and people from all walks of life, from, you know, students to professors to people walking off the street saying, this is important to me and I just wanted to say something.
BOB GARFIELD:
What is Chairman Martin's take on media consolidation, at this point? Is he, as you suggested in [LAUGHS] your blog, the ghost of Michael Powell or is he forging his own agenda?
JOHN EGGERTON:
Well, I think he's forging his own agenda because he's got a lot of other things to worry about. The DTV transition is a huge item to deal with.
BOB GARFIELD:
And that's digital TV mandated for virtually all broadcasters sometime in 2009.
JOHN EGGERTON:
Yes. He's got the “a la carte,” which is his major issue, unbundling cable's programming, either at the wholesale or at the consumer level.

I think he believes that the media should be allowed to consolidate because I think he agrees that there's much more competition than there was when the rules were originally written -- that there's cable, that there's satellite, that there's the Internet, and he believes that those voices should be counted. Now, I think he's also a realist. He has a Democratic Congress to oversee him, so, I believe, as a realist, I think he would accept some modified version of the rule to allow newspapers and TV stations to be owned in the same market.

At the end of the day, he will try to craft rules that allow broadcasters to be what I believe he thinks is more competitive in an increasingly competitive marketplace.
BOB GARFIELD:
All right, John. Well, as always, thanks very much.
JOHN EGGERTON:
Thanks, Bob.
BOB GARFIELD:
John Eggerton is the Washington Bureau Chief for Broadcasting and Cable Magazine.